Flowserve (FLS) Q4 2025 earnings summary

Executive summary

• Achieved strong financial and operational performance in 2025, surpassing long-term margin targets two years ahead of plan, with sales up 4% year-over-year and significant margin expansion driven by aftermarket growth and operational excellence.

• Completed the divestiture of legacy asbestos liabilities and integrated the MOGAS acquisition, realizing cost synergies and margin improvements.

• Announced acquisition of Trillium Flow Technologies' Valves Division, expected to close mid-2026, expanding nuclear and power market presence and content by 15%-20% per new reactor.

• Disciplined capital allocation with significant cash returns to shareholders and a healthy balance sheet.

• Initiated 2026 guidance and set 2030 financial targets, including mid-single digit organic sales CAGR and ~20% adjusted operating margin.

Financial highlights

• Q4 2025 sales reached $1.22 billion, up 4% year-over-year; full year sales were $4.73 billion, up 3.8%.

• Adjusted gross margin for Q4 was 36% (up 320 bps YoY); adjusted operating margin expanded 420 bps to 16.8%.

• Adjusted EPS for Q4 was $1.11, a 59% increase YoY; full-year adjusted EPS was $3.64, up 38%.

• Generated $506 million in operating cash flow for 2025 and returned $365 million to shareholders.

• Q4 operating margin was 3.5% (impacted by asbestos divestiture); reported EPS was ($0.23) due to net expense items.

Outlook and guidance

• 2026 guidance: total sales growth of 5%-7%, adjusted EPS of $4.00-$4.20 (midpoint up 13% YoY), and ~100 bps operating margin expansion.

• 2026 guidance assumes Trillium acquisition closes mid-year and is EPS neutral for 2026.

• Expect 76% of backlog to convert to revenue in 2026, with first half earnings representing ~40% of full-year total.

• 2030 targets: mid-single digit organic sales CAGR, ~20% adjusted operating margin, double-digit adjusted EPS CAGR.

• Targeting mid-single digit bookings growth in 2026, with favorable end-market demand.